JUDY WOODRUFF, CNN HOST: Thank you for joining us. I'm in New York today.

We begin with new ammunition for Democrats demanding a Senate investigation of pre-war intelligence about Iraq. The Bush administration now acknowledges that the president's State of the Union statement that Iraq sought to buy nuclear material from Africa was wrong.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: This is a very important admission. It's a recognition that we were provided faulty information and I think it's all the more reason why a full investigation of all of the facts surrounding this situation be undertaken. The sooner the better.

(END VIDEO CLIP)

WOODRUFF: Even tougher words from Democratic Party Chairman Terry McAuliffe. He charges the president either knowingly used false information in his address or that senior administration officials allowed him to use the information. The White House denies knowing at the time that the information was bogus.

(BEGIN VIDEO CLIP)

SEN. RICK SANTORUM (R), PENNSYLVANIA: The administration, I think, has been very forthright. I think that's the real issue. The issue has been administration was forthright about what they knew and when they knew it. And I think they had the best information that they thought and it was reliable at the time that the president said it.

(END VIDEO CLIP)

WOODRUFF: We're going to be diving deeper into this political debate a little later with the vice chairman of the Senate Intelligence Committee, Jay Rockefeller.

Well, questions about intelligence are just one topic of partisan sparring on Capitol Hill. As our Congressional correspondent Jonathan Karl reports, lawmakers have a full plate, but they may not be able to digest it all.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Seniors shouldn't count on help paying for prescription drugs yet. As talks begin on resolving the differences between House and Senate bills, the battle lines are drawn, especially in the Senate which passed the bill by an overwhelming 76 to 21 margin.

DASCHLE: Don't be deceived by the overwhelming margin here. As Senator Kennedy lays out in his letter, we have some very significant concerns.

KARL: Senate Democrats have written a letter to President Bush warning they will strongly oppose any compromise that includes provisions passed by the House to give private insurance companies a larger role in providing Medicare. They expect to have more than 40 signatures on the letter by the end of the day, enough to block any bill they don't like. A final compromise on the issue is still seen as more likely than not, but it is no longer considered the slam dunk it seemed to be just two weeks ago.

The wrangling over prescription drugs is a sign of things to come.

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: We're at the point in the political cycle -- if we're not there, we're almost there -- where every issue is being regarded in partisan terms and political terms, really, in terms of the 2004 elections. It's hard to see anything controversial getting bipartisan support from now on.

KARL: Back when Congress passed its last big tax cut and began charging ahead on prescription, the president basked in his party's legislative victories.

G.W. BUSH: The vice president and I came up to congratulate the speaker and the leader on a season of accomplishment.

KARL: Six weeks later, that season of accomplishment is starting to look like a season of political discontent.

Case in point: the Senate is now debating a bill to limit medical malpractice awards, a priority for the White House and a red flag to most Democrats. It will be argued vigorously, but has virtually no chance of passing.

REP. TOM DELAY (R-TX), MAJORITY LEADER: In bringing this bill up and getting most of Democratic friends to vote against it and fellow Republicans to vote against it, and they're going to take it on the campaign trail.

(END VIDEOTAPE)

KARL: On Medicare, Majority Leader Tom DeLay over in the House says that if Democrats are drawing a line in the sand in terms of what they will support, the answer to that is to leave them out of final negotiation between the House and the Senate. DeLay, talking to reporters today, said of the Democrats -- quote -- "they will be the first ones that will gripe and scream and whine that they were not included. When you draw lines in the sand, you get excluded."

So Judy, we'll see how this one plays out. But right now, a very rocky start to the beginning of what could be rather intense negotiations over prescription drugs for Medicare.

WOODRUFF: Sounds like it's not going to be resolved quickly. All right, Jon Karl at the Capitol, thanks very much.

Future Democratic Senate races lead the headlines in our "Campaign News Daily." Minority Leader Tom Daschle, whom you just saw, has released his first campaign ad of the season. The spot, expected to run for at least two weeks, highlights Daschle's role in promoting ethanol fuel made from South Dakota corn.

(BEGIN VIDEO CLIP, AD)

ANNOUNCER: Now, Tom Daschle is close to passing new energy legislation that would triple ethanol production in South Dakota.

Daschle's legislation could mean as many as 10,000 new jobs. That's very important to the state.

(END VIDEO CLIP)

WOODRUFF: In Alaska, former Democratic Governor Tony Knowles wants to return to politics, this time in Washington. Knowles announced today that he will run for the Senate seat held by Republican Lisa Murkowski. She was appointed by her father and predecessor, Frank Murkowski, who vacated the seat last year when he was elected governor.

In Pennsylvania, Democratic Congressman Joseph Hoeffel says he will run against four-term Republican Senator Arlen Specter next year. Hoeffel's announcement included an endorsement from current governor former DNC chairman, Ed Rendell. When contacted by CNN, Hoeffel said he thinks Senator Specter is vulnerable because -- quote -- "he is voting with the White House down the line" -- endquote.

And one more Senate announcement to tell you about, this one a Republican. Florida Congressman Mark Foley today filed papers to run for the seat now held by Democratic presidential candidate Bob Graham. Graham has said he does not anticipate running for reelection, but he has not ruled it out.

In California, leaders of the campaign to oust Governor Gray Davis are calling it quits, they say, on their petition drive and claiming a victory. They say they have gathered now more than enough signatures to force a special recall election this fall.

CNN's Charles Feldman has more on the recall campaign and the likely legal battles ahead.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Recall Gray Davis.

CHARLES FELDMAN, CNN CORRESPONDENT (voice-over): It appears as if the July 4 weekend helped put organizers of an effort to recall California Governor Gray Davis over the top. Anti-Davis forces were out in number, say they collected more than 180,000 signatures to force special election this fall. Recall organizers tell CNN they now have more than 1 million signatures, enough to withstand any verification challenges and have stopped the gathering process.

FELDMAN: For students of the contested 2000 presidential election, California may soon start to resemble Florida.

SHERRI BEBIICH JEFFE, POLITICAL ANALYST: It is clear that there will be litigation and legal challenges every step of the way, both by the opponents of the recall and the proponents of the recall, who are right now questioning the Democratic secretary of state and his decision that the county clerks don't have to be fast in getting those signatures in.

FELDMAN: And should a recall election be held, voters will get to select a new governor. But that selection, too, is likely to be challenged in the courts.

(on camera): Does this look a little bit like the mess we just had in Florida?

SEAN STEELE, RECALL ORGANIZER: This is called a tremendous challenge in democracy and a transference of power. California is the sixth-largest economic power in the Earth. We have a dysfunctional government, a dysfunctional economy, a dysfunctional budget. What do you do in a circumstance like this?

FELDMAN (voice-over): Just like the 2000 presidential election, complete with its hanging chads, what's happening now in California is a trip into unchartered waters. JEFFE: Nobody is really sure of the actual procedure because we never had to go through this before.

FELDMAN: Portrait of two states: Florida and now California. And there's the sign post up ahead: next stop, the Twilight Zone.

Charles Feldman, CNN, Los Angeles. .

(END VIDEOTAPE)

WOODRUFF: What a story.

Well, now to the race to '04. Democratic contenders Howard Dean and John Kerry both are in meetings today with their aides trying to figure out where their campaigns go from here.

The Kerry camp says their man remains the leader of the Democratic pack and their session is not, they say, a response to Howard Dean's sudden surge of money and enthusiasm.

Meantime, Dean aides say that they are so far ahead of where they expected to be, they're discussing earlier staffing of the lead-off primary states.

A GOP strategist contends that Dean's success is great news. In a memo out today titled "Happy days are here again for Republicans," Bill McEnturff (ph) writes, "Either Dean wins the nomination or he defines the Democratic Party, its image and the debate throughout the primary and the convention." McEnturff goes on to write, "So what do Republicans get out of this? A sustained battle for the nomination with a candidate who continues to drag the perception of the Democratic Party far to the left in regard to the use of force" -- endquote.

Well, retired General Wesley Clark still is mulling a possible Democratic run for the White House. But to his loyal contingent of supporters, he was the toast of this town last night, as CNN's Jeanne Moos reports.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): For a retired general like Wesley Clark, draft usually refers to dragging people into military service and a campaign is what you carry out when you wage war.

CLARK: It is degraded.

MOOS: But there's nothing degrading about having your name on t- shirts and bumper stickers if you're being prodded to run for president.

(on camera): So you're saying, please, run, General.

UNIDENTIFIED MALE: yes.

MOOS: You're begging.

UNIDENTIFIED MALE: We're begging.

UNIDENTIFIED FEMALE: We need you. The country needs you.

MOOS (voice-over): What started as a "Draft Wesley Clark" Web site has snowballed into meet-ups in 155 cities around the country.

UNIDENTIFIED MALE: I've got New York on the line. Say hi to New York.

MOOS: They didn't get to say hi to General Clark. He'd literally gone fishing and was unavailable for comment. But he sure hasn't discouraged presidential speculation on shows like "Meet The Press."

CLARK: I'm going to have to consider it.

MOOS: Tim Russert played the general a commercial that run in New Hampshire.

AD ANNOUNCER: Rhodes scholar, four-star general, business leader. And with your support, the next president of the United States.

CLARK: It's amazing.

MOOS: Folks got to see a lot of General Clark during the war with Iraq when he was a CNN analyst.

UNIDENTIFIED MALE: And so we thought this guy would be terrific.

UNIDENTIFIED MALE: He has an intellectual gift.

UNIDENTIFIED MALE: Wesley Clark fits the profile for the perfect person to defeat George Bush.

MOOS: As "Esquire" magazine put it, "Stop looking at the Jennifer Lopez pin-up. The man who can defeat George Bush if he wants to." The general had his own pin-up inside.

Two of the Draft Wesley Clark organizers are brothers-in-law.

UNIDENTIFIED MALE: I am the Democrat turned Republican.

UNIDENTIFIED MALE: Josh is a Republican, I'm a Democrat. And there are two ways of looking at politics. It's just his way happens to be wrong.

MOOS: But the do agree on Wesley Clark.

With time running out, the nation-wide meet-ups culminated in a draft beer toast to draft General Clark, though there was bad news from the New York bartender.

UNIDENTIFIED MALE: I can't have a draft because I'm working today.

MOOS: Oh, well.

CROWD: Four, three, two, one -- to Wesley Clark.

UNIDENTIFIED MALE: Happy draft.

MOOS: Any more puns and General Wesley Clark may retreat from politics.

UNIDENTIFIED MALE: Wes is more. Clark the herald angels sing.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: And,General Clark, if you're watching from a fishing camp somewhere, call us up let us know what you're going to do.

Up next, was it a State of the Union snafu? Did the president misknowingly (ph) mislead Americans about Iraq? We will ask the top Democrat on the Senate Intelligence Committee when we return.

(COMMERCIAL BREAK)

WOODRUFF: The revelation that President Bush's State of the Union address contained false information about alleged Iraqi government attempts to buy uranium has sparked a growing political dust-up Washington.

I'm joined now from Capitol Hill by West Virginia Democrat Jay Rockefeller. He is vice chairman of the Senate Intelligence Committee.

Senator, what does this say, if anything, about the president's credibility?

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: I think it hurts his credibility. He apologized, said it shouldn't have been in there. Most of us knew that quite a long time ago. The whole theory about Niger and Iraq and enriched uranium has long since been disproved. And it's not a bright chapter for the administration.

WOODRUFF: The White House spokesman, Ari Fleischer, Senator, is saying that the White House did not know before the State of the Union address that this information was false. Go ahead.

ROCKEFELLER: Well, see that then brings up a much more basic question, Judy. And that is why? Why didn't they know? I mean all 14 intelligence agencies basically work for the president. He is the final receiver of intelligence and analysis.

Now they give him the best analysis they have. They had pretty much broadly discounted this whole Niger problem. But somehow on the way up through the NSC or at some various points people had neglected to look at what the intelligence community of the United States was saying, as well as the intelligence community of other parts of the world.

WOODRUFF: Are you getting any better information than we are about what happened at the White House?

ROCKEFELLER: No, not in terms of what happened at the White House. But I think we have had good information for quite some time now that this whole -- that it was just fraudulent episode. I mean there was nothing about it that made any sense at all.

And there wasn't a single person who stood up for it. The president did use it in his speech. That was obviously a very important State of the Union speech because in a sense it kind of shaped the climate of what the American people might be thinking about the prospect of going to war with Iraq and that was a pretty potent thing. Nuclear weapons are not incidental matters.

So it was wrong to put it in and he was right to admit that it was wrong to put it in. The problem is, the damage was already done.

WOODRUFF: Even though now, Senator, that they're acknowledging that it was wrong to put it in, they're saying that this in no way takes anything away from the president's broader allegation that Iraq did have weapons of mass destruction. What about that now?

ROCKEFELLER: Well, what do you think a nuclear weapon is? It's a weapon of mass destruction. I mean, you got chemical, you got biological and you got nuclear. That's all there really is.

And so this was taking the most dangerous of the three of those, that is a potential for a weaponized nuclear weapon, granted at an early stage, and saying that it was on its way to Iraq and that it was going to be turned into a nuclear weapon and holding out that prospect, not in so many words, but in every sense of the way he talked and the way it was put.

WOODRUFF: What -- in your mind, what has to be done now to get to the bottom of this?

ROCKEFELLER: We have to find out what happened to broadly held intelligence within the United States that this was not anything that amounted to anything, that it was wrong, that it was fraudulent, that it was a forged signature, it was a (UNINTELLIGIBLE) signature of somebody who had been out of office for ten years at the time that he was meant to have forged the signature. And we have to find out what happened from going from the analysis side, that is the intelligence side to the policy making side which is the whole executive branch side.

And that's going to be a serious inquiry. I've already asked Senator Roberts and I've already asked for the CIA and for the State Department for their inspector generals to report on that to us. I've asked the FBI for the same thing. We have to get to the bottom of this. It's a very important thing.

We are in an era where you cannot say wrong things that give wrong impressions because everything is so fragile and on such a hair trigger.

A little earlier I discussed the same issue with former Democratic Senator Bob Kerrey here in New York. He voiced strong concerns over an intelligence gathering process that allowed false information to be included in a State of the Union address.

(BEGIN VIDEO CLIP)

BOB KERREY (D), FRM. U.S. SENATOR: I just think they made a terrible mistake. At least leaving the impression that if the boss wants a conclusion to be A, you're going to deliver intelligence for that intelligence to be an A, because that's what he wants.

(END VIDEO CLIP)

WOODRUFF: Senator Kerrey now president of the New School here in New York. You can see my complete interview with Senator Kerry tomorrow right here on INSIDE POLITICS.

Just ahead, a new look at a U.S. failure in Africa. Are the Somalia policies of former Presidents Bush and Clinton haunting the current president? Thoughts from our Bill Schneider when we return.

(COMMERCIAL BREAK)

WOODRUFF: President Bush's current travels in Africa and the potential deployment of U.S. troops to Liberia bring back not-so- distant memories of major U.S. policy failure. Will the ghost of Somalia alter this president's decision making? Some thoughts from our Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): A ghost hovers over President Bush's trip to Africa, the ghost of Somalia. In December 1992, a month before he left office, President Bush's father committed U.S. troops to Somalia for humanitarian reasons.

(BEGIN VIDEO CLIP -- DECEMBER 1992)

GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES: Morally, a failure to respond to massive human catastrophes like that in Somalia would scar our -- the sole of our nation.

(END VIDEO CLIP)

SCHNEIDER: The mission ended a year later in political catastrophe. The famine in Somalia had political causes and there was no way the U.S. could resolve the crisis without becoming embroiled in Somali politics. When 18 Marines got killed, Americans were outraged and the U.S. was out of there. "No more Somalias" became a guiding principle of U.S. policy. G.W. BUSH: Somalia started off as a humanitarian mission and then changed into a nation-building mission. And that's were the mission went wrong.

SCHNEIDER: Somalia had consequences: it emboldened al Qaeda. Osama bin Laden is reported to have drawn the lesson that the U.S. lacked resolve.

For years the U.S. was reluctant to make any new commitments in Africa. When President Clinton went to Africa in 1998, he expressed shame over America's failure to prevent genocide in Rwanda.

(BEGIN VIDEO CLIP -- MARCH 1998)

BILL CLINTON, PRESIDENT OF THE UNITED STATES: We did not act quickly enough after the killing began.

(END VIDEO CLIP)

SCHNEIDER: Now this President Bush is ready to make a new commitment to Africa, once again on humanitarian ground.

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: We do fear legitimately a humanitarian problem, a humanitarian crisis as a result of the suffering that is going on in Liberia.

SCHNEIDER: This time the cause of the humanitarian crisis is even more clearly political.

G.W. BUSH: President Taylor needs to step down so that his country can be spared further bloodshed.

SCHNEIDER: What's changed since Somalia? The stakes are higher.

J. STAKA KONNEH, LIBERIA ASSN. PRESIDENT: If Liberia is left alone, this would create the situation for the breeding ground of terrorists.

SCHNEIDER: And unlike Somalia, the United States knows it.

G.W. BUSH: America's committed to the success of Africa because we understand failed states spreading stability and terror that threatens us all.

(END VIDEOTAPE)

SCHNEIDER: After the Persian Gulf War, President Bush's father said, We've kicked the Vietnam Syndrome once and for all. Now with the war on terrorism, the current President Bush may be able to say, We've kicked the Somalia Syndrome once and for all -- Judy.

WOODRUFF: All right, Bill Schneider reporting for us from Washington. Thanks, Bill.

Still ahead, can't they all just get along? If you ever asked that question about Congress, our Bruce Morton will remind you it wasn't always this way.

(COMMERCIAL BREAK)

WOODRUFF: We've heard President Bush talk about bipartisanship, a sense of togetherness. It frankly isn't always evident on Capitol Hill. But it was today, at least during a ceremony honoring former House members. As our Bruce Morton explains, it was a flash back to the days when Republicans and Democrats seemed a lot friendlier.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The House honored four of its former members. Republican leader John Rhodes, battling cancer, his son accepted for him. Former GOP leader Bob Michel of Illinois. Democrats Don Edwards of California and Lou Stokes of Ohio.

But maybe the most interesting thing was the House these ex- members remembered, a bipartisan house where Republicans and Democrats were actually friends, knew and liked each other. Edwards remembered the bipartisan majorities that passed the 1964 and '65 Civil Rights Laws.

DON EDWARDS (D), FRM. CONGRESSMAN: And all I would say is, Do good, do good for the American people. Don't do any harm. And the same would apply to the billions of people throughout the world. Do good for them, too. Be a good neighbor.

MORTON: An emotional Michel in the minority all of his years in the Congress still remembered making a difference, remembered working with members of both parties.

ROBERT MICHEL (R), FRM. CONGRESSMAN: We were just always good friends and we went at it hammer and thongs from whatever it was 12 to 6 or 7. But then after all the arguments back and forth, you know, you could still be good personal friends. That's the way I like to see these deliberative bodies work.

MORTON: That's not the way it works now. It's more partisan, members don't socialize as much, get to know each other as well. But today offered memories of a kinder time, of a House that many felt at home in.